In a challenging market with sustained exceptionally low interest rates, Nordea‘s earnings declined 1% over the full year. Income from Shipping, Offshore & Oil Services was down 15 % from 2015.
Total income from Shipping, Offshore & Oil Services was 340 mill. € in 2016, d[ds_preview]own 15 % from 2015. The reduction was mainly due to lower net interest income, but results from items at fair value and net fee and commission income were also reduced. Lending volumes were slightly down compared to last year.
Net loan losses were 147 mill. € in 2016, of which the largest part was due to collective loan loss provisions mainly related to the offshore portfolio. The significant increase in loan losses reflects the deteriorating situation for the offshore industry during the year, the bank says.
Casper von Koskull, CEO of Nordea, commented: »The coming year might be another tough one. We will operate in an economic environment with great uncertainty, low growth and low interest rates. However, what makes me optimistic is that Nordea is entering the new year in better shape than when it went into 2016.«
Lending to shipping, offshore and oil services constituted 4% of the Group’s total lending.
The overall credit quality remains solid with strongly rated customers, the annual report says.
Nordea‘s total income was 2,262 mill. €, down 8% compared to last year (a 6% decrease in local currencies), mainly due to lower net interest income. Total expenses decreased by 4% from last year (3% in local currencies). Continued strict resource management resulted in lower REA and a continued competitive cost-income ratio of 40%. Operating profit was 1,068 mill. € and the business area ROCAR amounted to 10%.
